Zee Entertainment acquires TV business of Reliance Capital

Proceeds from the sale will help Reliance Capital reduce its debt by Rs 1,900 crore.

Anil Ambani, chairman of the Reliance Anil Dhirubhai Ambani Group, attends the annual general meeting of Reliance Capital in Mumbai September 27, 2011.Reuters

Anil Ambani-led ADAG subsidiary Reliance Capital on Wednesday said it was selling off its Radio and TV businesses, which would help the company reduce its debt by Rs 1,900 crore or $283 million upon final completion or stake sale transactions.

"These transactions form part of Reliance Capital's stated strategy to reduce leverage and exposure in non-core business of media and entertainment," Reliance Capital said in a statement. Reliance Broadcast Network Limited (RBNL) has signed definitive and binding agreements with Zee Media Corporation Limited (ZMCL) to sell 49% stake in its radio broadcast business.

Additionally, Zee Entertainment Enterprises Ltd (ZEEL), a separate entity under Zee Group will acquire 100 percent stake in the company's general entertainment TV business. The entire proceeds from the stake sale will be used to reduce Reliance Capital's debt.

Both the transactions have been approved by the boards of respective companies and are expected to be completed by next year, subject to applicable approvals.

Reliance Broadcast Network Limited runs the largest network of FM Radio channels in India under the brand name of 92.7 Big FM, which reaches out to 45 cities, 1,200 towns and over 200 million people.

The Reliance Capital stock closed at Rs 438.60 on Wednesday, up 4.47 percent from its previous close on the Bombay Stock Exchange.